[GTS and Esprit Telecom Complete US$5 Billion Merger, Creating One of the Largest Independent Pan-European Telecoms Company]
Operational highlights:
* Europe's largest cross-border fiber optic network, with over 12,000 operational kilometers, a significant lead over any other operator
* Operations in 20 countries across Europe
* Over 35,000 business customers in Western Europe
* A broad portfolio of business and carrier telecommunications services
* Competitive local exchange carriers (CLECs) in five Eastern European cities, with plans for 12 in Western Europe over the next three years
* Announced joint venture (JV) to build world's first 1.28 terabits capacity transatlantic cable system
* 3,000 employees
Financial highlights:
* Market capitalization of approximately $5 billion
* Latest quarter annualized consolidated revenues of approximately US$565 million for the two companies combined
MCLEAN, Va. and LONDON, March 5 /PRNEwswire/ --Global TeleSystems Group, Inc. (GTS) (Nasdaq, Easdaq: GTSG) and Esprit Telecom Group plc (Esprit Telecom) (NASDAQ:ESPRY; Easdaq: ESPR) announced today, in light of yesterday's release, that -- with GTS shareholders having approved the acquisition of all outstanding Esprit Telecom shares yesterday -- the company has now begun to integrate the two companies.
The completion of this merger puts the combined company firmly on trackfor meeting its objective of becoming Europe's premier provider of a wide range of end-user and carrier communications services. The merger capitalizes on GTS's position as the leading alternative network operator in Europe and on Esprit Telecom's position as one of Europe's largest independent pan-European telecommunications services provider.
Commenting on the successful conclusion on the deal, Gerald W. Thames, GTS's vice chairman, president and chief executive officer (CEO), said: "This is a great day for our combined company. Today, GTS is one of the fastest-growing pan-European telecommunications companies, with a network that currently has a significant advantage over its nearest competitors. Looking forward, I believe that about 70 percent of the market's growth will come from providing IP-based services for data as well as voice. In particular, we need to help customers overcome the network access bottlenecks they face. We are therefore planning to have 50 Network Access Points and several web hosting centers up and running in the next two years.
"Through FA-1, our transoceanic cable JV, GTS's end-to-end European network will be connected across the Atlantic. In turn, we anticipate thiswill lead to an increased customer base, both in the U.S. and in Europe. Weare also growing our Internet business based on our Ebone network and haverecently made significant investments in ISPs in Poland, Hungary and the Czech Republic."
To help realize this vision, David Oertle, formerly CEO of Esprit Telecom, now assumes his new role as senior advisor to GTS and Thames.
Today, the company also announced structural changes in the senior operational management team:
* Dr. Hans Peter Kohlhammer, formerly group managing director -- sales and marketing at Esprit Telecom, becomes president of GTS Business Services -- Western Europe. Kohlhammer will maintain his present organization structure at Esprit Telecom, supplemented by the operations activities previously managed by Jim Reynolds at Esprit Telecom. This division will continue to use the Esprit Telecom brand with the tag line "A GTS Company."
* Kevin Power, managing director, GTS Monaco Access, will integrate all wholesale activities from Esprit Telecom and GTS under a new line of business as president of GTS Wholesale Services.
* Jim Reynolds, formerly chief operating officer (COO) of Esprit Telecom, becomes president of Hermes Europe Railtel (HER) and will integrate the operations of HER and Esprit Telecom Networks (ETN) -- 12,200 and 2,030-route kilometers of fiber, respectively. This area includes the fiber network and the bandwidth business. Reynolds now reports to Jan Loeber, president of GTS Carrier Services.
As a result, GTS will now operate through six lines of business:
* GTS Business Services -- Western Europe under Dr. Hans Peter Kohlhammer
* GTS Access Services under Les Harris, which includes the Central European region managed by Lou Toth
* GTS Carrier Services under Jan Loeber
* GTS Wholesale Services under Kevin Power
* GTS Business Services -- CIS under Stewart Reich
* GTS Mobile Services under Gerard Essing
The presidents of these lines of business report to Bruno d'Avanzo, GTS's executive vice president and COO. In addition, NetSource Europe ASA willcontinue to operate as an independent business unit, managed by John Cronin,reporting directly to d'Avanzo as well. At a later date NetSource will be integrated under GTS Business Services -- Western Europe.
The combination of the two companies' assets is expected to create a strong service offering in the European telecommunications market. Customers are expected to benefit from the synergies between the two companies' networks and services. Esprit Telecom has one of the most highly developed sales and marketing structures of any alternative telecommunications services company in Europe, with an extensive pan-European customer base and strong back office and customer service expertise. GTS has strength in running successful CLEC and carriers' carrier services. The successful combination of this expertise is expected to result in a better overall product and service offering for GTS customers. |
